This week’s OKEx trading data shows an expansion of this market optimism, starting with the long/short ratio recording another recent high at 0.95, while the premium stayed above $200. The steady rise in the margin lending ratio on the spot market also indicates that market participants held on to their coins and were not shaken by small price fluctuations.

The overall trend in Bitcoin is positive, as interest from large institutions continues to be high. This week we also observed some de-risking sentiment among market participants, but Bitcoin’s response to the pullback in the equities was limited.

OKEx trading data readings

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BTC long/short ratio

The long/short ratio over the past seven days has been running in the range between 0.85 and 0.95, up significantly from the 0.7 to 0.85 range during the first week of October. This also relates greatly to the price breaking above $11,000 and the market sentiment improving.

The long/short ratio compares the total number of users opening long positions versus those opening short positions. The ratio is compiled from all futures and perpetual swaps, and the long/short side of a user is determined by their net position in BTC. In the derivatives market, whenever a long position is opened, it is balanced by a short position. The total number of long positions must be equal to the total number of short positions. When the ratio is low, it indicates that more people are holding shorts.

BTC basis

The basis between quarterly futures and spot has improved from last Friday’s 1.9% to the current 2.1%. The basis had risen to $300, or roughly 2.5%, on Monday, confirming the market optimism, as any value above 2% is healthy for a bull market.

This indicator shows the quarterly futures price, spot index price and also the basis difference. The basis of a particular time equals the quarterly futures price minus the spot index price. The price of futures reflects the traders’ expectations of the price of Bitcoin. When the basis is positive, it indicates that the market is bullish. When the basis is negative, it indicates that the market is bearish. The basis of quarterly futures can better indicate the long-term market trend. When the basis is high (either positive or negative), it means there’s more room for arbitrage.

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.

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